CHAPTER 14
Employment Law III: Labor—Management
Relations
Chapter Goals
In order to place the law in context, the chapter begins with a summary of the working conditions and
general societal circumstances that gave rise to the union movement. Given business students’
characteristic skepticism regarding unions, we believe that the instructor would be well advised to give
careful attention to the roots of the union movement. Students may need to be reminded that unions
arose from legitimate, serious grievances.
The heart of the chapter is the extensive analysis of the statutory and case law in Parts Two through
Seven. Here we believe that the thrust of the approach should lie not so much in the specifics of statutory
interpretation, as in exploration of the broad labor-management problems that confront business people
on a day-to-day basis.
Chapter Learning Objectives
1. Describe both the decline of labor unions and their hopes for renewal.
2. Describe the goals of the National Labor Relations Act (NLRA).
3. Identify unfair labor practices by management and unions.
4. Describe the role of the National Labor Relations Board (NLRB) in enforcing the NLRA.
5. Describe the process of union organizing and the related legal issues.
6. Describe “bargaining in good faith.”
7. Distinguish between “unfair labor practice strikes” and “economic strikes.”
8. Compare and contrast “primary picketing” and “secondary picketing/boycotts.”
9. Describe employees’ rights within or against unions.
10. Explain the impact of “right to work” laws on union security agreements.
Chapter Outline
I. Introduction
Substantial decreases in private consumption and investment in recent years, leading to declines in
manufacturing and construction have significantly impacted union membership. In 2013, the union
membership rate remained at 11.3 percent of the workforce as in 2012; since 1983, union membership
has fallen nearly 50 percent. The union membership rate in the private sector is roughly 6 percent,
whereas over two-thirds of public-sector workers are unionized.
Auto Industry and Unions
Union problems in the manufacturing sector were vividly illustrated by the 2007 settlements of new
labor agreements between the UAW and the Big Three American automobile manufacturers:
General Motors (GM), Ford, and Chrysler. In return for automakers’ promises of investments to
maintain manufacturing jobs in the United States, UAW members agreed to dramatic contract
changes, allowing the Big Three to compete more effectively with their nonunion competitors,
Toyota, Honda, and others.
Union Support
According to a 2013 Pew poll, over half of Americans have a favorable view of labor unions, having
rebounded nearly 10 percent from 2011. However, laws curtailing the power of unions have been
passed in state legislatures. For example, in 2011, Wisconsin passed a law restricting public-sector
employees’ collective-bargaining rights. In 2012, Michigan, known as the home of the unionized
auto worker, became a “right to work” state.
Does the Union Have a Fight Song?
In 2014, Peter Ohr, a regional director of the National Labor Relations Board (NLRB), ruled that
Northwestern University football players are university employees and are therefore able to form
the first college athletes’ union. The NCAA has treated college athletes as students first, and as
athletes second; therefore, the NCAA believes these players should not be treated as employees.
In ruling that these players are actually athletes first, Ohr noted that the athletes’ duties to the
university’s team require 40 to 50 hours per week during the football season, which is not only
more than what many other full-time employees spend on their jobs, but is more than the players
spent on their studies.
Part One—History
As the United States moved from an agrarian to an industrial society in the late 1880s, business
competition was fierce. Costs had to be cut. By paying workers as little as possible and making them work
14- to 18-hour days, employers could prosper. Farmers began moving to the city to be near their jobs and
thus left their safety net of gardens, chickens, and cows. Similarly, immigrants streamed into the big cities,
and competition for jobs became heated.
A. A Grim Picture
To say that working conditions for many people at this time were unpleasant or even dismal would be
a vast understatement. The term desperate better describes the problem. Children were impressed
into service as soon as they were big enough to do a job and then made to work 12- and 14-hour
days. In fact, small children were employed in coal mines for 10 to 12 hours each day, and at a rate of
$1 to $3 per week, because they were small enough to fit in the confined spaces. 13 Textile companies
sent men called slavers to New England and southern farm communities to gather young women to
work in the mill. These circumstances enable us to better understand the sense of injustice felt by
many workers and the belief that a redistribution of wealth might provide the only solution to class
conflict.
I. Organizing Labor
The Knights of Labor, the first major labor organization in the United States; had a large following during
the 1870s and 1880s. The order admitted any workers to its ranks, regardless of occupation, gender, or
nationality; in fact, the only people excluded from the group were gamblers, bankers, stockbrokers, and
liquor dealers. The Knights of Labor dedicated itself to principles of social reform, including the protection
of wage and hour laws, improved health care systems, and mandatory education. However, the goals of
the Knights of Labor were perhaps too broad and far-reaching to bring workers any relief from their
immediate problems. Great philosophical divisions within the Knights of Labor brought about its decline.
A. Skilled Workers
Samuel Gompers, who built and developed the American Federation of Labor (AFL), had more
practical, attainable goals in mind for his organization. He saw the need to organize workers along
craft lines (such as plumbers, electricians, etc.) so that each craft group could seek higher wages and
better working conditions for its own workers, all of whom had the same type of skills and, presumably,
shared the same occupational goals.
B. Laborers
The Congress of Industrial Organizations (CIO) was organized in response to the needs of ordinary
laborers not working in the skilled trades to which the AFL was devoted. The AFL and CIO were fierce
competitors, but after years of bitter conflict, the two groups united forces in 1955. They function
together today as the AFL-CIO.
[For the AFL–CIO home page, see http://www.aflcio.org]
II. Unions and the Developing Law
A. Labor Protection
Responding to mounting public pressure, Congress passed the Norris-LaGuardia Act in 1932 making
clear that the terminology “restraint of trade,” which was the heart of the 1890 Sherman Antitrust Act,
was not meant to include labor organizations or activities. From 1932 to 1935, labor tensions
continued to mount. The nation was still caught in the Great Depression. Believing that one element
essential to economic recovery was stability in the workforce, Congress addressed the labor question
with the Wagner Act of 1935. This legislation gave workers for the first time the unequivocal right to
organize and engage in concerted activities for their mutual aid and benefit. To protect this right,
Congress identified and made illegal a number of unfair labor practices. Through the Wagner Act,
Congress also established the National labor Relations Board.
B. Management Protection
Congress enacted the Taft–Hartley Act, identifying as unfair labor practices certain activities unions
used to exercise economic leverage over employers as part of the collective bargaining process. The
Taft-Hartley Act signaled a move by the government away from unconditional support for labor toward
a balance of rights between labor and management.
C. Corrupt Union Leaders
In response to the growing evidence that that union leaders were benefiting at the expense of the
membership, Congress in 1959 enacted the Landrum–Griffin Act, requiring unions to keep records of
their funds. It also prohibits unions from lending money except under specified circumstances and
procedures, all of which must be reported annually to the government.
D. Members’ Rights
The Landrum–Griffin Act contains a set of provisions often referred to as the “Bill of Rights” for
individual union members. These provisions are designed to protect union members by requiring that
union meetings be held, that members be permitted to speak and vote at these meetings, that every
employee covered by a collective-bargaining agreement has the right to see a copy of that agreement,
and that a union member be informed of the reasons and given a chance for a hearing if the union
wishes to suspend or take disciplinary action against that member, unless her or she is being
suspended for nonpayment of dues.
The law has also regulated the manner in which unions represent employees in the
collective-bargaining process. Because a union serves as employees’ exclusive bargaining
representative, the courts have devised a duty of fair representation.
Part Two—Labor Legislation Today
Today labor–management relations are governed by the National Labor Relations Act (NLRA), as
enforced by the National Labor Relations Board (NLRB). This act includes within it the Wagner Act, the
Taft–Hartley Act, and portions of the Landrum–Griffin Act. The remaining provisions of the Landrum–Griffin
Act make up the Labor–Management Reporting and Disclosure Act and the Bill of Rights of Members of
Labor Organizations.
Practicing Ethics—Reading Your Rights at Work
Posters by the U.S. Department of Labor and the Equal Employment Opportunity Commission informing
workers of their rights are familiar sights in the workplace. In 2012, the NLRB issued a Notice Posting
Rule requiring most private-sector employers—regardless of whether their workers were unionized—to
post a notice advising employees of their rights under the NLRA. Two federal appellate decisions
invalidated this rule; the NLRB announced in 2014 that it would not seek review by the U.S. Supreme
Court. Therefore, employers may choose not to post such a message. In addition, the NLRB has
established a free NLRB mobile app for iPhone and Android users to provide the public with information
about the National Labor Relations Act.
Source: NLRB Office of Public Affairs, “The NLRB’s Notice Posting Rule,” January 6, 2014
[http://www.nlrb.gov/news-outreach/news-story/nlrbs-notice-posting-rule]
A. Right to Organize
Section 7 of the NLRA gives employees the right to engage in concerted activity, including strikes and
collective bargaining. When political issues such as immigration become heated, employees’ political
advocacy efforts may affect the workplace. Political advocacy may in some circumstances be
considered a concerted activity for “mutual aid or protection” under Section 7.
[For a vast database of federal and state labor law statutes and regulations, see
http://topics.law.cornell.edu/wex/labor]
Bleeping Protected Activity?
During ongoing union negotiations, Bill Barker, a company vice president at the Tampa Tribune, sent
employees a series of letters, which were legal and accurate, describing the negotiation process from
his perspective. In talking to supervisors about the letters one night after he arrived for his third shift,
an employee, Greg McMillen , said: “I hope that f**king idiot [Barker] doesn’t send me another letter.
I’m pretty stressed, and if there is another letter you might not see me. I might be out on stress.”
McMillen was fired for violating a company policy against using threatening and abusive language in
the company building. McMillen complained to the NLRB.
Source: Media General Operations v. NLRB, 560 F.3d 181 (4th Cir. 2009).
B. Unfair Labor Practices by Management
The NLRA describes and outlaws certain activities by employers that would hamper or discourage
employees from exercising the rights granted to them in Section 7. Thus Section 8(a) of the act makes
it an unfair labor practice for an employer to:
Interfere with, restrain, or coerce employees in the exercise of the rights given to them by
Section 7
Dominate, interfere, or assist with the formation of any labor organization, including contributing
financial support to it
Encourage or discourage membership in any labor organization by discrimination in regard to
hiring, tenure of employment, promotion, salary, or any other term of employment
Discharge or take any other action against an employee because he or she has filed charges or
given testimony under the act
Refuse to bargain collectively with a duly certified representative of the employees
These five provisions are designed to allow employees to organize in an atmosphere free from
intimidation by the employer. In addition, if employees have chosen a union as their exclusive
collective bargaining representative, Section 8(a) regulates the bargaining between the employer and
the union.
At-Will Disclaimers
Recently, the employee handbook has been the source of complaints that employers are violating
their employees’ NLRA rights. For example, the at-will provision, typically signed by new
employees, may state: “I agree that the at-will employment relationship cannot be amended,
modified, or altered in any way.” This provision may be unlawful, because it waives the employee’s
right to act with other employees to change the nature of their employment relationship. However,
an at-will provision declaring that managers and supervisors have no authority to alter the
employment relationship’s at-will status, without restricting the employee’s ability to engage in
concerted activity to do so, has been considered valid by the NLRB.
Dress Codes
Pro-union hats, T-shirts, and the like are commonly used in union campaigns. However, under
recent federal court decisions, employers may limit such attire for a legitimate business interest.
All Because of a Bad Haircut?
Embarrassed over a bad haircut, Nichole Wright-Gore, a supply clerk for White Oak Manor, started
wearing a hat to work. After several days, supervisors told her to remove the hat as it violated a
company dress code prohibiting hats; she refused and was disciplined. Wright-Gore subsequently
began to take photos of her coworkers, some with and without consent, showing them wearing hats
and violating the dress code in other ways, which she shared with coworkers while discussing with
them the unequal enforcement of the dress code. After employees complained about having their
photos taken and shared with others without their consent, Wright-Gore was terminated for
violating White Oak’s policy prohibiting photos being taken in the facility.
Social Media Policies
Employers, seeking to protect their online reputation and lessen their risk of employment-related
liability for, as an example, harassment, may have a “social media policy” prohibiting certain
conduct on Facebook and similar sites. In 2011 and 2012, the NLRB issued three Advice Memos to
help employers avoid violating employees’ NLRA Section 7’s right to communicate about their
terms and conditions of employment through social media policies. If employees would reasonably
read the policy to mean, for example, they are not allowed to discuss wages or ask each other
about perceptions of unfair treatment, then the policy would likely violate the NLRA. In its 2012
decision in Costco Wholesale Corporation, the NLRB found that Costco’s social media policy
violated the NLRA in prohibiting employees from electronically posting statements that would, for
example, “defame the Company” or “damage any person’s reputation.” Employees may have
interpreted this broad policy as preventing them from engaging in such concerted activity as
discussing possible mistreatment of employees.
C. Unfair Labor Practices by Unions
Section 8(b) lists activities constituting unfair labor practices by a labor organization. Some of these
mirror some of the activities prohibited to employers. A labor organization is not permitted to:
Restrain or coerce any employee in the exercise of his or her rights as granted by Section 7
Cause or attempt to cause an employer to discriminate against an employee who has chosen
not to join a particular labor organization or has been denied membership in such an
organization
Refuse to bargain collectively with an employer on behalf of the bargaining unit it is certified to
represent
Induce or attempt to induce an employer to engage in secondary boycott activities
Require employees to become union members and then charge them excessive or
discriminatory dues
Representation Procedures
Section 9 specifies the election procedures by which employees may choose whether to be
represented by a particular union or no union at all.
I. National Labor Relations Board (NLRB)
The NLRB is a federal administrative agency responsible for regulating labor–management relations. Its
primary tasks are designating appropriate bargaining units of workers (deciding which workers have a
sufficient community of interest so that their needs can best be acknowledged and so that collective
bargaining is efficient for the employer and the union); conducting elections for union representation
within the chosen bargaining unit; certifying the results of such elections; and investigating, prosecuting,
and adjudicating unfair labor practice charges.
Although the congressional mandate by which the NLRB was formed gives the agency jurisdiction
theoretically to the full extent of the interstate commerce powers vested in Congress, the agency has
neither the funding nor the staff to administer its duties to all of American industry. Some smaller
businesses, government employees, railroad, and airline workers covered by the Railway Labor Act,
agricultural workers, domestic workers, independent contractors, and supervisors and other managerial
employees are not protected by the board.
Over the years, the five-member NLRB has been criticized for sometimes reaching decisions based on
political/philosophical considerations rather than legal reasoning. As successive presidential
administrations appoint NLRB members, the Board’s decisions often “seesaw” according to the changes
in Washington political power.
[For more on the NLRB, see www.nlrb.gov]
Part Three—Elections
I. Choosing a Bargaining Representative
Representation elections are the process by which the NLRB achieves the first of the two statutory goals
under the act—employee freedom of choice. That goal, however, is sometimes in conflict with the other
statutory goal—stable collective bargaining. The NLRB has devised rules to resolve such conflicts.
[For the AFL–CIO view of why workers should join unions, see www.workingamerica.org/issue]
A. Election Petition
A union, employee, or employer initiates the formal organizing process by filing an election petition
with the NLRB. The petition is sent to the employer, thus providing notice of union activity. Also, the
employer must post notices supplied by the NLRB so that employees are aware of the petition. The
NLRB then assumes its authority to closely oversee the conduct of employer and union. Of course at
that point, the employer is free to simply acknowledge its employees’ interest in joining a particular
union and to engage in bargaining with that union, a decision normally called voluntary recognition.
Sometimes an employer enters an agreement with a union specifying that the employer will voluntarily
recognize the union if the union can demonstrate that it has majority support among the employees.
Majority support is often established by a card check method where employees signify their interest in
the union simply by signing authorization cards. The card check approach thus bypasses the secret
ballot election and can greatly ease union organizing. One of the controversial NLRB decisions of
2007, however, overturned 40 years of precedent and made the card check method less useful for
union organizing. In Dana Corporation/Metaldyne, the NLRB ruled that where an employer voluntarily
recognizes a union based on a card check majority, antiunion employees now have 45 days to petition
the board for a federally supervised, secret ballot election to decertify the newly recognized union or to
support a petition by a rival union.
Failing voluntary recognition, the process proceeds according to NLRB rules. The NLRB will accept
only those election petitions supported by a substantial showing of interest, which, at a minimum, must
include the signatures of at least 30 percent of the employees in the bargaining unit. (In practice today,
most unions will not proceed toward an election without 50 to 65 percent of the employees’
signatures.) Those signatures accompany the petition, or they may appear on the authorization cards.
B. Procedure
Prior to an election, the NLRB ordinarily will first attempt to settle certain issues such as whether a
union contract already covers the employees or whether the election should be delayed. In
determining the timing of the election, the two statutory goals of employee free choice and stable
collective-bargaining may conflict.
The crucial issue to be addressed at this point, however, is normally whether the proposed bargaining
unit (the designated employee group—for example, all hourly workers, all welders, etc.) is appropriate
for the election.